A Nederlander regulator mentioned the crypto derivatives market ought to be limited to wholesale trade. The reason why aren’t unfamiliar — insufficient transparency, market manipulation and “other types of criminal activity.”
On May 12, the mind of Capital Markets and Transparency Supervision in the Nederlander Authority for Markets (AFM), Paul-Willem van Gerwen, shared his opinion around the crypto derivatives trade in the Amsterdam Propriety Traders Managers Meeting.
Van Gerwen highlighted, that despite (or possibly due to) the market’s rising curiosity about crypto derivatives buying and selling, the AFM “do regard such trade as entailing risks” and think about the forex market to become less mature because the other derivatives markets. A particular problem as a result of the volatility from the crypto products, based on van Gerwen, results in a question of whether “the parties towards the derivative transaction is going to be capable of fulfill their promises.”
Hence, the AFM believes that operations with crypto derivatives ought to be limited to the wholesale trade. The state acknowledged that, unlike its British counterparts in the Financial Conduct Authority (FCA), the AFM hasn’t banned such trade, but alluded it surely might achieve this:
“Don’t get up to date within the excitement of the buying and selling, don’t be enticed into retail buying and selling.”
Also, he added, “Cryptos and derived tools aren’t yet appropriate as a way of payment and/or investment.”
Another subject van Gerwen pointed out in the speech was the distributed ledger’s effect on clearing. Only at that he sounded a lot more positive, acknowledging the benefits of while using blockchain in clearing operations, but, all over again, was careful while commenting around the industry’s possible role:
“In principle proprietary traders don’t get involved with clearing. But the technological developments can lead to a scenario where a peer-2-peer model arises, with proprietary traders possibly beginning to take part in clearing themselves.”
Further studying: Binance apparently halts crypto derivatives service in The country
The speaker encouraged the guests to get familiar with DLT pilot cases the Nederlander financial government bodies are managing inside a sandbox atmosphere.
In August 2021 the central bank from the Netherlands issued an alert to Binance for offering crypto services with no needed legal registration.